AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 11, 2001

• 0904

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good morning, everyone. We'd like to call our meeting to order, again, pursuant to Standing Order 108(2).

With the first part of our meeting this morning we have one hour to spend meeting with witnesses from Flowers Canada and the Canadian Nursery Landscape Association. We'd like to welcome them to our meeting this morning.

Before I get the witnesses started, I would like this morning, as chairman, to thank Suzie Larocque for her work with the committee over the past months. Suzie is moving on to another job within a few days.

• 0905

Suzie, I know the notes we had and the information you provided, on behalf of the clerk, were certainly well received by committee members. I do want to thank you and wish you all the success in your new job, and hopefully if we need assistance we can always remember your telephone number.

With the meeting this morning, Mr. McTavish will be the lead on this with a short, probably 10- or 15-minute presentation, and then we'll get into some questions.

Welcome to our committee. We certainly appreciate the beautiful flowers that are on our desks here this morning, and of course the TV reflects that too. I don't see a hummingbird with them, but I'm sure one must be at the doors outside.

Mr. McTavish, you may proceed.

Mr. Bruce McTavish (Past President, Planning and Governance, Canadian Nursery Landscape Association): Thank you very much, ladies and gentlemen of the standing committee, for taking the time to see us and for inviting us here today.

We'd like to take a few minutes to tell you a little about who and what we are.

Because we're an industry that sells beauty, we thought we'd do a PowerPoint presentation. Some of it is to show you a little about what we do in the Canadian environment, not only to help the environment but also to beautify urban neighbourhoods. And we do have some slides to show.

One of the reasons we wanted to meet with you people is we are the largest single sector of horticulture and we don't often tell our story. So we thought this would be a good opportunity to tell our story, because we see ourselves as a key part of agriculture.

You have in front of you today representatives from all across Canada. We have CNLA, which is the Canadian Nursery Landscape Association, representing growers, retailers, landscapers. We have Flowers Canada, the flower industry, and FIHOQ, which is the Fédération interdisciplinaire de l'horticulture ornementale du Québec.

So we are a very cohesive group. Between the three groups we cover all of ornamental horticulture.

We'll talk a little about our industry. We'll give you a background of who and what we are, and then we want to talk a little about some of the things we're doing that we feel are critical for the continued health and success of our industry. So we'll go through those and we'll have several speakers speak to the different points.

Who are we? Floriculture. If you think of floriculture, all you need to think about is this. When you walk into a florist, into a garden centre, you have bedding plants, pot plants, foliage, greenery. Anything you can think of that you're buying that comes out of a greenhouse in the ornamental world comes out of the flower production. On the nursery side, if you walk into a garden centre and you hire a landscaper or you're buying trees, shrubs, roses, azaleas, rhododendrons, street trees, that's all part of our industry.

I think a lot of people find it quite interesting when we show them that we represent 40% of the total horticultural industry, if you take floriculture and nursery combined. It makes us the single largest sector in all of horticulture, so we're larger than potatoes or vegetables or tree fruits.

People don't often realize that, because we're like the silent majority. We don't blow our horn too much and we tend to be very much free enterprisers, so we haven't been in front of politicians too often. Though we have some projects going on and we've had a lot of help from people like the market industry services branch, we work very closely with CFIA, which we'll tell you a little more about.

If you look at our total farm gate, we were at $1.76 billion last year. If you factor that up to the retail side, we had sales out of our retail sector of about $3.7 billion. It makes us a sizeable industry. If you look at the latest statistics from Statistics Canada, we employ 52,000 people and we're also the fastest growing sector of agriculture. If you go over the past decade, we've seen growth of about 8.7% annually over the last ten years.

The next slide shows, as a percentage, ornamentals, vegetables, potatoes, and then going down. It's a nice representation of where we compare with the other sectors of the industry.

• 0910

There is another sector we also represent that I didn't mention initially—a lot of our members are also sod growers and Christmas tree growers. If you add those in, we have another $79 million and $73 million. So whenever you're buying sod to put in your front lawn, that's us.

If you were out walking around the market square looking at all the beautiful Christmas trees last night, those are probably coming from our members as well.

Last year was a particularly big year for us, and a lot of this was driven by exports.

Like every other industry in Canada now, keeping that border open is really important for us. A lot of our growth has been driven by exports, particularly to the United States, so we certainly like to see anything that expedites our trucks getting across the border and not holding us up.

We saw sales last year go up by 20% in floriculture, by 23% in nursery, and I'll show you in a minute that we've had exports increase by 35% over the last three years.

The other interesting thing with our industry, and it helps us in our risk management, is we do a lot of growing under glass and under polyethylene, so we manage our environment. We have a huge diversity of crops—7,500 different crops in nursery and over 200 in flowers. So if one crop isn't doing well, there's usually another crop. It's not like having a single commodity. It's not like having potatoes. If there's a glut of potatoes in the market, everybody does poorly. You might have too many roses, but not enough rhododendrons, so we tend to balance our industry out.

The next slide gives you a graphic representation of sales, and then we'll go right to the last one that I'll speak to, and I think this is probably very important. It shows the balance of trade.

I think everybody in this room, being in agriculture, is aware of some of the implications when we see such a large switch in the balance of trade with the United States.

Historically, we've been a net importer from the United States of ornamental nursery products. There was a significant shift around 1997, and you can see that we are now a net exporter, with that gap about the same as it historically had been with the United States.

One of the things we're looking at and we're being very careful about is how we manage our relationship with our U.S. customers and with other growers in the United States to make sure we don't get ourselves into tricky trade positions with the U.S.

I'll leave it there and turn it over to Garry.

Dr. Garry Watson (Executive Director, Flowers Canada): The next slide indicates a lot of commonality with other agricultural industries. We share many of their problems, but we also share many of the successes. The points I'd like to highlight are some of those reasons for the success of the ornamental industry.

The cost of our labour, our gas, our electricity, and other inputs is quite high, but we have world-class, energy-efficient facilities that make it easy and possible for us to manage these costly inputs. We have a sophisticated wholesale product distribution mechanism because our products are perishable. A day stuck in transit anywhere makes a significant difference to the quality of the product. We have globally integrated markets and globally integrated products.

Things are set across the world that affect the price and the quality of Canadian flowers and plants. We have leading-edge technology, and Canada has a great opportunity for exporting our technology in research, in science, in facility, in computer architecture, and in computerized controls. We have excellent support from the banking industry, because they see the horticulture industry, and particularly ornamentals, as a good place to invest right now. We're supported by strong industry associations—the three that are before you today. And I think, importantly, they're very much free enterprise growers; they're not controlled by marketing boards or quota systems.

One of the pictures in front of you is a range of greenhouses in Leamington, Ontario. Across Canada there are just under 4,000 acres under glass or under double plastic film, polyethylene film. On the nursery side, there are just under 100,000 acres of nursery products in production, and that's amplified by another 22,000 acres of sod under production.

Next we want to talk a little about the best-kept secret in Canada, being the ornamental industry. We suffer, I think, and we're behind other countries by not having an active marketing and promotion program for generic sales of plants and flowers. For example, fewer than five households in Canada buy some flowers monthly. On a daily basis, Canadians consume one-quarter or one-eighth the number of flowers that our friends in European countries consume, where flowers and flower-giving are a part of the lifestyle. In Canada they're still seen very much as a luxury item.

• 0915

There was a three-year pilot project in the United States a few years back that was designed to show that with some generic marketing, they could increase the sales of flower products in the times between the traditional holidays. In doing so, they managed to increase sales by 10% in just three years. When the program was cancelled, the sales immediately fell back to their original point.

Currently there's a new program in the U.S. called the Flower Promotion Organization, which is a joint program with the South American growers and the U.S. horticultural companies. They have shown in the last year that with some targeted promotion in five cities in that country, they've increased their purchasing and the frequency of purchasing of flowers by between 27% and 58%, depending on when you measure.

I'm now going to turn it over to our colleague.

[Translation]

Mr. Jacques Côté (Executive Director, Fédération interdisciplinaire de l'horticulture ornementale du Québec): To continue on the important initiative of generic promotion, we would like to point out that the United States is the largest potential market for the export of our ornamental plants.

At the moment, Canadian exports to the U.S. account for only 1.5% of the sales of ornamental plants there, where the total market is $12.1 billion.

The Netherlands are the world leader in the promotion of ornamental horticulture. Their promotion efforts are based on the uniformity and quality of their product, its integration into the Dutch lifestyle, the freshness of the product, and the standardization of maintenance and handling practices.

The Canadian ornamental horticulture sector urgently needs a generic promotion program. The estimated cost of such a program is approximately $5 million a year. The anticipated results include increased profits, more jobs, increased GST remittances and increased payroll and corporate taxes. In order to achieve our generic promotion objectives, we need good quality-control procedures. Canadian consumers who purchase plant products do so based on their quality. They expect the plants to be free from diseases and pests.

The CNLA, as well as our federation, has initiated a quality assurance program for nurseries similar to the quality assurance or quality control programs for wine (VQA), and those used by the ISO—everyone is familiar with the International Organization for Standardization—and the quality assurance programs used in the Netherlands or the one known as Florverde, a successful program in Colombia. The idea is to adapt the best practices and successful quality control programs in place in both Europe and Canada.

[English]

Dr. Garry Watson: The main difference between ornamentals and other commodities is that we do not have in place a levy system on each sale to promote the consumption of our products in Canada. This is why we're interested in developing a generic promotion program.

When we talk to our growers, the most significant concern they raise with the associations is their inability to compete internationally on the basis of access to good pest control products. We've done diligent work over the past several years, because of the nature of our industries, to promote integrated pest management. What that means is using all possible methodologies in rotation—chemical, natural, biological, and cultivation practices—to ensure that we have good-quality products.

• 0920

We are, however, dependent on access to selected pesticides that will work in our contained environments in a safe manner. There's a broad selection of these materials available to U.S. and European producers, but at this point, not to Canadians. Our access has been difficult, but we have managed to work with the regulatory agencies in Canada, and we're having some success.

For numbers for comparison, in our industry last year there were about 901 new active ingredients and uses made available for ornamental horticulture. In Canada, we only had 24 available. So we're significantly behind the United States in access to these products.

There are some disincentives with our system. I don't want to belabour those, but the cost to promote a new active ingredient in Canada has user fees attached, and the return for chemical companies and others may not be significant to warrant that cost. There is a requirement for some repetition of scientific results that may be available elsewhere. We often have to do additional field trials because of our climatic zones in Canada.

More importantly, when the work has been done to suit the United States Environmental Protection Agency, our agency requires a reformatting of the data, which can cost $30,000 to $40,000. We have had a considerable, significant competitive disadvantage because of this, and we do lack access at this point to newer and safer pest controls.

Instead of whining about it, our industry has decided to do something positive. The next slide will show you a couple of the initiatives we have taken to work with the Canadian authorities to try to expedite the registration and the understanding of how we need to use these products to provide cleaner, safer, pest-free products to our consumers.

The national ornamental minor use label expansion is a committee made up of floristry, forestry, nursery, and turf growers who try to get together and look ahead and determine what are very useful active ingredients in each industry. They try to make a joint submission of those requirements to our Pest Management Regulatory Agency, thereby saving our time, the regulator's time, and more importantly, the agricultural chemical companies' money.

We've been applauded for helping the PMRA reduce their workload. We had a very positive meeting with them yesterday to look forward to see how we can work together to encourage all the parties to provide our growers with increasing arsenals in dealing with these pests. Because of these initiatives over these past couple of years, floriculture has achieved 18 new registrations in a year or two, compared to three in the previous two decades. There has been little improvement so far for nursery, but they're catching up quickly. We expect great results in the next few years.

We are supporting the recommendations of a recent report by the Canadian Horticultural Council. We're looking at a commitment, on our part and on the part of government, to fundamental change in the regulatory process. We heard yesterday of great success in working with joint reviews with the United States and other countries. We're very supportive of that. We're working with them to develop an action plan for new products that are lower-risk. We recognize the problems that the PMRA and other participants face in our process, and we're committed to working with them in joint registrations.

Mr. Jeff Hicks (National Growers Chair, Canadian Nursery Landscape Association): If you remember back to the balance of trade slide that—

The Chair: I'm sorry, Mr. Hicks, we've gone nearly 18 minutes now. Can you be brief so that we'll have time for some dialogue, some questions?

Mr. Jeff Hicks: Sure. I think there are only three more slides and we're finished.

If you remember back to the balance of trade slide, you'll see why the next three slides are important to our industry. Trade is important, and pest introductions in our country make it impossible sometimes to export to other countries if we can't get the pest under control.

Invasions from foreign pests have been devastating to Canada, especially in the last couple of years. The plum pox virus in Ontario and chrysanthemum white rust in B.C. recently cost the Canadian government a lot of money. The Canadian Food Inspection Agency spent in excess of $40 million to get plum pox under control in southern Ontario, and in just eight weeks chrysanthemum white rust recently has cost $2 million.

• 0925

The development of a new strategy within the industry, using government as partners is a priority. Adequate detection, eradication, and a compensation mechanism must be developed as part of the plan.

On the next slide we see components of the strategy. Early detection, both from industry and government, is important. The Canadian Food Inspection Agency plays the lead role for eradication and detection in our country. They have been doing an excellent job, as has been noticed recently, but with the increase of these pests around the world through globalization, we expect the demand on CFIA's time to be increased and we want to ensure they have adequate resources to do their job.

We can also educate the industry to become part of their detection service. Through education and a compensation program, growers could become part of their protection service. The problem is that a lot of the pests come in looking very similar to a local not-so-harmful pest, so it's much better for us to educate them on what to look for and how to look for them.

A levy system, which basically would look at the importers of this risk or the creators of this risk, notably dunnage, wood packing, port cities, would help us with a fund that could be used towards eradication and detection.

The benefits from emergency eradication would be better partnerships than we already have with the Canadian Food Inspection Agency, working towards coordinated efforts such as has been seen recently with plum pox virus and chrysanthemum white rust. Reduced eradication, research and quarantine costs...this is obvious. If we can detect the pest sooner and eradicate it sooner, it'll cost less. Reduced pest management costs as well, obviously...reduced environmental damage.

We have gypsy moths on the east coast and they have been devastating. If gypsy moths were to become established on the west coast, it would be far more devastating. It would wipe out the Garry oak stands in Victoria. Environmentally, the impacts would be huge.

The Asian longhorned beetle in the United States has devastated street tree programs and parks. We just saw what happened in parks in Halifax because the spruce beetle got out of control. So the impact to the environment also is devastating.

Also, fairness to producers...it makes CFIA's job a little easier when they can make decisions to basically eradicate crops to eliminate the pest if there's a compensation program in place.

That basically ends our program. Thank you very much for your attention to this, and we're happy to answer any of your questions.

The Chair: Thank you, Mr. Hicks, Mr. McTavish, and Dr. Watson.

Howard.

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): We're so pleased to have you here today, gentlemen. We're particularly pleased to hear the words “free enterprise” and to see an industry that literally looks at opportunities and problems, makes decisions and moves on, and is tremendously successful.

Of your $1.7 billion industry, what value of exports do you currently have?

Dr. Garry Watson: Apparently about $400 million.

Mr. Howard Hilstrom: So you even outdo supply management in exports, because they're around $250 million to $300 million.

You've covered an awful lot, and we'll accept everything you've put forward there. It will look like we're jumping around here a little, but there are a couple of issues.

The first one I'll deal with concerns an article in the American Nurseryman magazine dated November 15. It insinuates that Canadian nursery stock being imported into the United States might not be disease-free, as the Canadian quarantine system is lacking. Is there any problem with exports into the States, and as we increase our exports, is there any concern they will use phytosanitary issues as a means of prohibiting imports to the States?

Mr. Bruce McTavish: Yes, certainly that's one of our concerns when we see that balance of trade shift. We had some very good meetings yesterday with the CFIA on developing strategies to make sure that doesn't happen.

• 0930

We have two things we're looking at. One is certification. A number of years ago CFIA put in certification programs both in flowers and nurseries, where we certify our nurseries as clean. That tends to give our importers on the other side a little more confidence. But the other thing is we feel statements like that are clearly not based on fact. We are also planning to spend more time educating the U.S. producers and our U.S. buyers on what the facts are in Canada, because we feel we probably have the best system in the world in terms of dealing with plant pests, plant quarantines. Everybody is struggling around the world because of these global outbreaks. An important part of it, as we were told yesterday with CFIA and MISB, is to really communicate with your U.S. customers.

Mr. Howard Hilstrom: Earlier on, Dr. Watson I believe mentioned that yesterday you heard of a great success story with regard to U.S.-Canada pesticides, chemicals. Is that what you were mentioning, Dr. Watson?

Dr. Garry Watson: That was my comment.

We understand that the Pest Management Regulatory Agency has been working very diligently with their counterparts in the United States. Also there is a program in the United States, which is heavily government subsidized both from the federal and state levels, called the IR-4 program. It's the kind of coordinating agency that we discussed. Our informal committee here is producing results to work with the regulators to identify priorities to try to work on those differences between the regulating systems and, although I don't like the word, increase the harmonization of the two processes, so that when work is done in one place it's going to be accepted by the other country.

Mr. Howard Hilstrom: Who was telling you this?

Dr. Garry Watson: We had a two-day workshop, sir, on Thursday and Friday with all of the stakeholders in Canada in minor use registration. The people attending were the Pest Management Regulatory Agency, the chemical companies, the associations, the producers. We know the system is not perfect, but I think there was a recognition and a willingness to work together to try to achieve a national, coordinated approach to solving some of the real roadblocks that we identified.

Mr. Howard Hilstrom: I think what we're hearing—and we get lobbied by everybody from veterinarian associations to the Canadian Fertilizer Institute to various chemical companies and farm association groups—is the Pest Management Regulatory Agency is a wreck. The Minister of Health, in order to get new products approved for use and to get rid of old products that are inferior and more toxic, takes as much as four years to get some of these things done. So I'm pleased that you have some hope that things are going to get better, but that's not what the majority of the industry is telling us. I just put that on the record.

You consider yourselves to be farms. You file farm income tax forms. The agriculture ministers, including the federal agriculture minister, have indicated that they have this five-year plan for agriculture. Of course, we're waiting for details and we didn't see any in the budget yesterday. But Minister Vanclief has come to this committee and has said that every farm is going to have an environmental plan within five years. Have you been briefed on that or have you been advised as to what you're going to have to do in that regard?

Dr. Garry Watson: From an early warning approach, we're aware that greenhouses—and I think the same will be true for nurseries—will have to be able to show that they're environmentally responsible and will probably be required to become part of a standard or a quality assurance program that measures their inputs and their outputs, similar to what is being done in Europe, and be able to reassure the public that no damage is being done to the environment by those operations.

• 0935

Mr. Howard Hilstrom: The last comments I have are just to give your industry a little bit of a caution to watch out for the present government, because with regard to western Canadian agriculture the present government is forcing upon us a marketing agency that the majority of farmers question, a significant minority want to get rid of outright, and the other third of farmers don't care. That's our Canadian Wheat Board. These Liberals are forcing that on us. They are forcing farmers to market through that whether they want to or not. So I'd caution you on that.

Lastly I'd ask you to quickly comment on the research into nursery stock. What is the government's involvement in research in your industry? Or is it all by yourselves?

Mr. Bruce McTavish: I guess this comes part and parcel of being really independent free enterprisers. We tend to do a lot of independent research, but recently we have been accessing some of the government funds through Agriculture's joint initiatives program, where we put up 50-cent dollars and then they put up 50%.

But we do a lot of it independently. We also do a lot of patenting and copyrighting. If we do it independently, we get to make the money on our discoveries.

Mr. Howard Hilstrom: Thank you.

The Chair: Thank you, Howard.

As a comment to the witnesses, members of the committee represent various parties. I noticed a little bit of surprise in some of your faces. But to introduce Howard, he is a member of the Canadian Alliance Party. Then we go to the Bloc. People tend to get a little bit political. As chair I have to be a little bit the other way. But in any case....

Marcel, say all you can.

[Translation]

Mr. Marcel Gagnon (Champlain, BQ): Thank you, Mr. Chairman. It is good that you distinguished between the two parties. I am from the Bloc Québécois.

Unfortunately, I missed the beginning of your presentation, because there are many activities happening at the same time. You may have already answered my questions at the beginning of your remarks. First of all, I would like to thank you for your beautiful presentation and for showing us your product in such a tangible way.

I have noticed that horticulture generally is very much in fashion in recent years. This includes decorative products, flowers and everything that makes our environment more beautiful. I do not know whether you mentioned this, but is this an area... We know that there is still a tremendous potential for sales. For example, you mentioned that the United States is one of the big markets that you are trying to develop. Do you have any figures on job creation? What would sales of $1 million or $1 billion represent in terms of jobs? Would this give the economy a boost?

Mr. Jacques Côté: One billion dollars in retail sales represents 30,000 jobs in high season. Our sector has part-time and full-time jobs. One-third of these jobs are permanent. So the equation is 30,000 jobs for $1 billion in sales.

Mr. Marcel Gagnon: That means that the more we promote our products abroad, the more we create jobs here at home. There has been an increase in trade with the United States for the last three or four years, and as a result, we have a positive balance of trade, in other words we sell more than we buy abroad. Will we still have significant opportunities to improve in this area in the next few years?

Mr. Jacques Côté: Yes, the potential is tremendous. If we have a generic promotion campaign and if we promote the exportation of our ornamental plants, the potential is enormous. The United States is a $12 billion market. Our plants are known to grow in northern climates. This important feature of our ornamental plants means that they are highly valued in the northern U.S..

• 0940

However, to date, our exports have been rather feeble. If we exclude Christmas trees, which sell very well, we still have a lot to do to assume our proper role in eastern Canada, or on the north-eastern U.S. market, for example.

Mr. Marcel Gagnon: There has been a problem since September 11. Have you had any problems given that your products have to be exported extremely quickly, and cross the border quickly? Is the situation back to normal now, for the holiday period?

Mr. Jacques Côté: We have not yet found that there have been that many problems, but we will have to see. That is still quite recent.

Mr. Marcel Gagnon: So much the better. You do not look for problems.

Mr. Jacques Côté: No.

Mr. Marcel Gagnon: There are other areas where, since September 11... However, we know that the situation has improved at the border.

When we talk about horticulture, we hear a great deal about all types of pesticides. In fact, you mentioned that there are 901 registered products in the United States, whereas in Canada there are only 24. And when we talk about pesticides, we are talking about damage to the environment. I heard that you were trying to be self-policing in the area of environmental protection. Is there a great need for pesticides, and are you asking to have as many as there are in the United States?

Mr. Jacques Côté: Ornamental horticulture accounts for about 3% of the pesticides used in agriculture, which is relatively low. Often, ornamental horticulture is singled out. In our view, horticulture is a question of esthetics. We need think only of all the benefits it offers. As you know, the urban environment is rather artificial. People have to create lawns and gardens. So if we do nothing to protect this heritage, we will lose it, with all that that implies. We need think only of photosynthesis, the purification of the air and the oxygen given off by all these plants. The situation is somewhat comparable to pharmacists who give us the pills we need to deal with the pests in our gardens.

Mr. Marcel Gagnon: What you say is true, particularly as regards Christmas trees, for example. However, lawns may not be the best thing for the environment. In addition, lawns are often placed on marginal lands. For example, cities often have to use huge quantities of water, often drinking water, unfortunately, to keep lawns presentable. When you sell sod, do you provide advice about improving the land on which sod is placed, so as to enhance the environment?

Mr. Jacques Côté: I will ask Mr. Mousseau to answer this question.

Mr. André Mousseau (President, Fédération interdisciplinaire de l'horticulture ornementale du Québec): We know that we have a lot of work to do to inform people in urban settings. We are working hard to explain to people how to look after their lawns properly.

Earlier, you were saying that lawns may not be that important, but 10,000 square feet of sod produces oxygen equivalent to the amount a person breathes. If the lawn around a house is done properly and is growing well, it compensates for the person living in the house. That is a very important point.

At the moment, the biggest problem with pesticides is that we do not have much access to the new, less dangerous pesticides. That is the problem; it is not that we are using a lot of pesticide. The problem is that we do not have access to the new pesticides that are much less dangerous for the environment. We are stuck with old pesticides, that are rather toxic, whereas the new ones are supposed to be much less toxic. However, our poor access to these products is delaying our ability to develop our industry and improve our competitive position with the U.S.

Mr. Marcel Gagnon: So what you need are pesticides that are less harmful to the environment, and you do not have access to them.

• 0945

[English]

The Chair: Thank you, Marcel.

Murray.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thanks very much, Mr. Chairman.

In rural caucus this morning we actually met with PMRA. We had Claire Franklin and Wendy Sexsmith in front of us. One of the things that we dug out this morning is there's a definite lack of communication between the industry and PMRA. I'll cite an example.

With the Prime Minister's task force on future opportunities for agriculture, we've heard from the hort industry that they've been looking for a clay spray to put over their apples. It's called kaolin clay. So I asked this morning what the problem was, and the problem was very simply this. They've asked for the research permit. It was granted, but they haven't submitted application for registration.

We, as members of Parliament, are hearing from the industry that there's a problem. We get PMRA in and we find that there is a problem; it's a communication problem. I'm wondering if you would like to expand on that and also on the IR-4. We went into that this morning too. Maybe you could give us a little bit more as to how that in fact is working.

Mr. Jeff Hicks: Thank you for the question.

You're absolutely right. There is a breakdown in communication when it comes to industry and PMRA. With regard to the Canadian horticulture system, the registration process used to work differently a number of years ago. I'm relatively new in this whole process myself. Within the last ten years we saw it go from going to a CHC meeting with the resolutions, and then those CHC executives would take it to the Minister of Agriculture, I think it was, who had the file, and PMRA or Health Canada were working along with them. That system was what they were used to. The big change that occurred not too many years ago of putting it into Health Canada was probably a very wise decision when it comes to the health of Canadians. The PMRA's mandate is to look after the health of Canadians. We completely understand that. But it left industry with the task of learning how to deal with their system, when we had a system that had existed for ourselves before.

It's not an easy system to deal with. I have some personal experience with it. It is definitely doable. I know in the flower industry they've had more success than we have, because they've now paid a full-time person to look after working with the PMRA. Our industry hasn't generated that type of revenue to be able to hire such a person. We see that as being a necessary step for us and we will do it. But we're not rich, despite what the implications of our slides may lead us to. We wouldn't want to go out and spend that money unless we had to. We see it now as probably the route we'll have to take. But it is a cumbersome process, and we do have to learn how that works. Communication is definitely important, though, and we're learning that.

Mr. Murray Calder: I'm going to throw an idea out here, because with the task force we've been looking for solutions of problems within the industry. As members of Parliament, we deal with problems and we move onto the next problem. If in fact we haven't totally solved the problem within PMRA, we know that in a couple of years' time you're going to be right back at our doorstep again. What I would like to take and do is look at something that's more proactive to having the problem solved internally.

Now, within the United States, the EPA has put forward an ombudsperson to deal with problems within the bureaucracy. I've done some research. There is the possibility of running an ombudsperson out of the Auditor General's office. In fact, the mechanism is already in place. It just has to be expanded. I'm wondering if you would comment on the idea of having an ombudsperson take a look at the problems within PMRA. If in fact it gets bound up in the bureaucracy, that individual will be the one to sort it out.

Dr. Garry Watson: Thanks for the question.

• 0950

We didn't mean to imply there were no problems with the PMRA. But I think we learned a few years ago that some face-to-face communication goes a long way to making sure there are no misunderstandings in the process.

The ombudsman concept, wherever it should be housed, was one of the recommendations that came out of both the Canadian Horticultural Council and this stakeholders' workshop last week. So we would be supportive of anyone who could do a little more of what we've been doing, which is trying to get the problem on the table, and without conflict, trying to work at a result to that problem.

The Chair: Rick.

Mr. Rick Borotsik (Brandon—Souris, PC/DR): Thank you, Mr. Chairman.

Before I get back to the PMRA, which seems to be a fairly reasonable focus here, I have a couple of questions.

On your slide, it was fairly noticeable that in 1997, trade into the United States seemed to take off. Can you give us any reason why, in 1997 and the years after that, the trade surpluses started coming our way?

Mr. Bruce McTavish: I think there are a couple of reasons. I'll give it a British Columbia twist because that's where Jeff's and my nursery is, so we see it there. We had a number of projects going. I think some of it was driven by us and some of it was driven by the falling dollar.

With the help of MISB on the nursery side, we launched a very good advertising campaign in the wholesale magazines in the U.S., linked to a website that had a database of all the plants that were available. Last year and the year before we were getting 25,000 to 30,000 hits per month. Now we're at close to 100,000 per month. We have a huge number of U.S. customers accessing that. So that is some of the help that was given by MISB.

Mr. Rick Borotsik: We have currently, as you said, 1.5% of the total American market, which is fairly minimal.

Is the Netherlands the major exporter into the United States, and are we taking their market?

Mr. Bruce McTavish: The market has been growing astronomically in the U.S. There is close to $500 million a year growth in the U.S. market.

Mr. Rick Borotsik: That's what you're picking up.

Mr. Bruce McTavish: We're picking up some of that growth as well, because their guys aren't growing fast enough.

Mr. Rick Borotsik: I always get nervous when we start having a balance of trade on our side. We've seen it in other commodities. If you're from B.C., obviously there's one commodity that comes to mind, and that's softwood lumber.

Are there any storm clouds on the horizon? You've mentioned the pests themselves and the phytosanitary.... Are there any storm clouds on the horizon with respect to trade into the United States?

Mr. Bruce McTavish: We've been getting some rumblings from our U.S. association counterparts around dumping issues.

Mr. Rick Borotsik: Are you getting any support from this government on trade issues? We didn't have a lot with softwood lumber. Are you starting that process now?

Mr. Bruce McTavish: Yes, that's one of the reasons we're here talking to you, but we were also talking to the market industry branch yesterday and will be talking with Agriculture and Agri-Food Canada experts on trade issues this afternoon.

We're trying, as a group, to develop a strategy to be in front of it instead of behind it.

Mr. Rick Borotsik: Thank you so very much. It's always better to be proactive as opposed to continually derailing.

Mr. Bruce McTavish: We try to be that way.

Mr. Rick Borotsik: Thank you.

I have two other questions, very quickly. On emergency eradication, you mention in your dissertation compensation for destroyed crops. That hasn't been touched on much. There is no policy in place now on CFIA and compensation. We've been dealing with another issue on SARA, the Species at Risk Act, asking for compensation for producers if they should have to maintain habitat for species at risk. There is no compensation coming from government. How confident are you that there may well be compensation for your requests here in eradication programs?

Dr. Garry Watson: On the flower side, rather than asking for after-the-fact compensation, we think a better approach would be to establish an existing fund, through whatever mechanism that can be drawn on when necessary. One of the best tools for that might be a revamp of some of the public and government farm insurance programs, so the producers can, as they choose, indemnify themselves in advance against any potential problems.

It's a little different in nurseries, and maybe Jeff will comment.

Mr. Rick Borotsik: Do you have any comments?

Mr. Jeff Hicks: No. That was fairly well-articulated.

At this point we don't know what a fund would look like. We recognize the importance for it. CFIA would also breathe a huge sigh of relief if a fund were available to them.

Mr. Rick Borotsik: I have one last question, Mr. Chairman, if I can go back to the PMRA.

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Dr. Watson, you said, and I quote, “I don't like the word `harmonization”'. Can you tell me why you don't like the word “harmonization”? Quite frankly, I think harmonization is a good word when you're talking about the PMRA and the EPA. Why don't you like the word “harmonization”?

Dr. Garry Watson: I think it has a number of nuances of interpretation that can be misinterpreted. I'd rather have the words “agreement” and “joint”. “Harmony” seems to imply that everything is wonderful.

Mr. Rick Borotsik: But you don't dislike the concept.

Dr. Garry Watson: I don't dislike the concept.

Mr. Rick Borotsik: It's just the word you're talking about.

Dr. Garry Watson: The word means a little too much.

Mr. Rick Borotsik: You scared me. I have to admit you scared me a lot, because we were talking about the concept of working together, and perhaps harmonization wasn't going to work.

Dr. Garry Watson: Working together is the key point.

Mr. Rick Borotsik: They talk the talk, but are you finding that PMRA are walking the walk right now, with respect to that cooperation and harmonization?

Dr. Garry Watson: I think they have a long way to go. The encouraging part was the senior staffer of the IR-4 was at our workshop on Thursday and Friday, and they have clearly offered whatever assistance may be necessary to sort out the differences.

Secondly, we had some time after the meeting with the head of the agencies from the U.K. and Australia. They said, “Don't worry too much. We've been through this same process and we got it fixed eventually.” So they were encouraging, and they have offered to provide their advice and assistance to Canada and the U.S.

The Chair: Thank you, Mr. Watson and Rick.

We have several people now who apparently have short questions.

David, can you be brief? Then I'll try to get to Rose-Marie.

Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance): I'm just wondering, are there trade restrictions on your products, particularly to the U.S. and Europe? Is there subsidization in the U.S. of your industry? We've run into that problem with some of the other products.

Mr. Bruce McTavish: No. We've historically been free traders with the U.S. Other than some phytosanitary restrictions that have traditionally been in place, we don't see any problems.

Mr. David Anderson: Okay, and you don't see anything on the horizon?

Mr. Bruce McTavish: No.

The Chair: Thank you, David.

Rose-Marie.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I thank you for your presentation this morning. My riding of Lambton—Kent—Middlesex in southwestern Ontario is probably one of the capitals for landscape flowers—Rosalea Gardens, which I'm sure you're well aware of. It's a beautiful spot to have such good neighbours. I don't have to keep my outside lights on because the greenhouses light up the night sky, but it's a lovely sight.

You say you have 1.5% of the U.S. market. What percentage would you like to attain in your industry? Whether you're a flower grower or a nursery person, is it incumbent to belong to an association? How much of a problem is the compensation issue in your industry?

Mr. Bruce McTavish: We've had some discussions around market share, and we feel that if we could, over a five-year period, double our market share, that would probably be realistic. We also have to build the infrastructure and do the expansion within our own growers. But if we continue to see the kind of growth we've been having, that's where we'll end up.

Mr. Jeff Hicks: The compensation issue is more of a proactive measure on our part. Pest invasions are on the rise. The U.S. has been described as being under siege by them right now. If that happens, the CFIA will need the ability to move on to a nursery or into any operation in horticulture or agriculture and to do quick and swift eradication.

So the compensation is really more of a proactive measure. It's not something we're up hard against right now, although some nurseries in southern Ontario would argue that right now, after having crops destroyed from plum pox virus. But it is very much a proactive measure.

Mrs. Rose-Marie Ur: Do you have to belong to an association?

Mr. Jeff Hicks: You do not have to belong to an association, but as Bruce points out, being free traders, our associations represent by far the majority of the dollar value of our industry. So the big players recognize and see the need to work together to become stronger, and our associations work very closely together. Competitors are also friends in our industry in very many cases.

The Chair: Thank you, Rose-Marie.

Mark's family, on the far side of the country from B.C., on Cape Breton Island, has an extremely large greenhouse operation.

Mark, I'll give you a few minutes.

Mr. Mark Eyking (Sydney—Victoria, Lib.): Thank you for coming here. I'm very interested in the market approach, and I think it's going to be your key to success. My cousins grow flowers in Holland, so I'm quite familiar with the whole auction system they have. That auction house is just mind boggling. There are 20 acres under one roof. The flowers are going by. You people know that.

• 1000

In visiting Europe, you see flowers. Everybody's using more flowers. You had the comparisons to North America, and I think there's so much growth potential there. I'd like to see every 7-Eleven have flowers in it. I don't know if that's an objective we can reach, but the key is going to be promotion, price, and availability. If you can have a cooler with dairy products or Pepsi in a store, why can't you have small coolers...?

I'm just wondering how we can tap into that market. I see a lot of people around me; they get their poinsettias once a year and buy flowers three or four times a year. If we can tap in to that, even every second week...are there any creative ideas on how we can tap into that?

Mr. Jeff Hicks: Well, certainly that centres around the “generic promotion of plants” component we had in our presentation. We are the only agricultural commodity that pays GST on its output. That has to have some benefit to taxpayers down the road. If we can increase the demand for plants, and clearly it's been proven we can, if we work together on building that, we become a healthier, stronger industry and generate more tax revenue.

It is certainly a goal to try to see people consume more plant material in Canada, and at the same time, hopefully, increase our exports. I don't know if that answers your question.

The Chair: Thank you, Mark and Jeff.

I had to allow Mark to get that little bit of advertising for your industry before the people of Canada today.

On behalf of the committee, I'd like to thank you for coming today. We certainly could spend a lot of time discussing this further, and I can see it's a growing industry with tremendous potential. We have many days during the year, like Mother's Day...and maybe a Father's Day flower would be good to come up with, too, because that would give us one in June.

In any case, we certainly appreciate your coming. Hopefully you as an industry can grow, and we as a government can continue to support you in some of the problems you have and some of the vision you have for your industry in the future.

With that, I'll adjourn the meeting for five minutes before we look at the second part, dealing with the Commissioner of the Environment.

Thank you for coming.

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• 1012

The Chair: We'll return now to our meeting and consideration of chapter 1—the Great Lakes and St. Lawrence River Basin—of the Commissioner of the Environment and Sustainable Development's report.

This morning, we would like to welcome from the Office of the Auditor General, Madame Gélinas, and from Agriculture and Agri-Food Canada, Ms. Baltacioglu.

Madame Gélinas, you will go first. Most of the committee is back. We welcome you to the committee, and we look forward to your presentation.

Ms. Johanne Gélinas (Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada): Thank you very much, Mr. Chairman, for the opportunity to appear before this committee. This is my first time appearing before your committee, and I look forward to many more opportunities. With me are my colleagues, John Reed and Peter Morrison.

The position of commissioner was created in 1995 through amendments to the Auditor General Act. My group has a legislative mandate to audit environmental and sustainable development issues and to track and report on commitments made by departments in their sustainable development strategy.

We also have an environmental petition process and have received some petitions on agricultural issues. One of my goals is to raise awareness of this process among Canadians.

I would like to present the key findings from our recent audit of the Great Lakes and St. Lawrence River Basin. I plan to give you a high-level overview of our main findings, as well as some specifics on the portion related to agriculture.

Agriculture is central to this story, in part because farm practices can affect the quality of off-farm environments, and also because the livelihood of farmers can be affected by their own on-farm practices and by activities in other sectors.

Our audit focused on the federal government management of sustainability in the Great Lakes and St. Lawrence River Basin for two important reasons. The basin is a critical environmental resource for the world, and it is home to 16 million Canadians who depend on it for clear air, drinking water, and personal health, employment, and recreation.

We focused on four main subject areas: water, species and spaces at risk, fisheries, and agriculture. Our objective was to determine whether the government is meeting its commitments, applying good management to the issues we examined, and employing good governance overall. Several federal departments were part of this audit.

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[Translation]

Although we focused on the basin, many of the issues and federal programs we examined are national in scope and thus our findings have potential national implications. I would also like to note that successful management of sustainability in the basin is not up to the federal government alone. This is an area of shared jurisdiction, and the provinces have a strong role to play, as do other levels of government, industry, farming organizations, scientists and individuals.

One of the findings of my Report is that there have been some remarkable environmental successes and improvements over the past three decades in the basin. Our audit specifically credits the role of individuals in the federal government for bringing about these improvements.

While some aspects of the basin are improving, according to today's best science, others are deteriorating right before our eyes. In the next generation, the basin's Canadian population is projected to grow by 3 million, and its GDP is expected to be 60% higher. The agriculture sector in particular is poised for substantial growth—the federal government supports a target to increase Canada's share of world exports to 4% by 2005.

And this brings me to why I am so concerned: The future of the basin is at risk. Federal efforts have lost momentum. The leadership, innovation, science and diligence that served the basin in the past have diminished. There is an overwhelming sense of complacency and resignation, instead of urgency and inspiration.

[English]

Our overall conclusion emphasized four major themes.

First, important matters are being left to drift. Key domestic and international commitments are not being met due in part to reduced funding to departments. For example, of the $125 million in new funding announced by the Minister of Environment in 1994 to support the Great Lakes action plan, the department received less than 12%. The commitments made by the government and the resources allocated to departments are out of sync.

Second, long-term basin-wide strategies for key threats are missing. There is no coordinated and consistent federal voice on key issues in the Great Lakes and the St. Lawrence regions.

Third, scientific research monitoring and measurement systems are impaired. There are major gaps in the information needed to make quality decisions on areas like wetlands, soil, and fish habitats.

Fourth, and last, the federal role is changing and waning. The government is not using the authorities and tools it has at its disposal to tackle the tough issues. It relies increasingly on partnership to meet its objectives. Our audit raised fundamental questions about the government's role in overseeing the actions of its partners and in providing assurance that federal and national objectives are being met.

I'd like to now talk more specifically about the agriculture portion of our audit. Over 100,000 farms account for the largest single use of land in the basin and contribute about 40% of the value of agricultural output in the Canadian economy. At the highest level, farming practices are having effects on the environment that cannot be sustained. To manage the environmental effects of agriculture successfully, many farmers need to improve their practices.

But our audit did not focus on farmers. It looked at the role played by the federal government.

Agriculture and Agri-Food Canada spends far more money on agricultural programs such as income support and stabilization than it spends directly on programs to reduce the environmental impact of agriculture. For example, in 1998-99 it spent $211 million on agricultural programs and $5.4 million on environmental programs.

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Moreover, agricultural programs can unintentionally encourage farmers to take actions that harm the environment, countering the gains made by environmental programs.

We examined the extent to which the department properly assesses the environmental impact of its various policies and programs. We found that the department has failed to fully meet its obligation to conduct program assessments.

We found gaps in compliance with legislative requirements to assess income support programs under the Farm Income Protection Act. For example, the net income stabilization account has not been assessed as required.

On another note, in 1990, cabinet directed all departments to assess the environmental implication of new policies and programs. These assessments were known as strategic environmental assessments. However, we found the department had an ad hoc and incomplete approach to this task.

[Translation]

We also examined how Agriculture and Agri-Food Canada is responding to two specific and high-priority issues: soil erosion and management of manure and nutrients. With respect to soil erosion, close to half of Ontario's agricultural soil is at risk of washing away faster than it can form. This has severe potential impacts on a farmer's ability to grow crops, but it is also a serious environmental problem. Ten years of federal and provincial government intervention have slowed the rate of erosion somewhat, but at a rate that could take another 90 years to bring soil losses down to sustainable levels.

Although the department has set objectives for reducing soil erosion, it has no plan of action to get there. To add to the problem, the scientific information on soil that is essential for good land management is becoming increasingly out of date and less useful. The soil issue demonstrates that sustainable development is as much an economic and social issue as it is an environmental one: How sustainable can farming be if there is not any soil to grow crops on?

Our audit also examined manure and fertilizer management, in part because Agriculture and Agri-Food Canada, Environment Canada, the provinces, and agricultural organizations have placed importance on this issue. The misuse of manure and fertilizer on farmland has damaged the ecosystem in the basin. Nutrients are accumulating in soil on farms, and the environmental impacts, mostly in the form of water contamination, are increasing. On over 30% of the farmland in the basin, residual nitrogen levels pose a risk of water contamination. For example, concentrations of phosphorus and inorganic nitrogen at the mouth of the Yamaska River in Quebec are higher than in any other tributary of the St. Lawrence River. The main cause is the growth in livestock production in the watershed—30% over the last 20 years. Many of the basin's rivers in south-western Ontario and Quebec have phosphorus concentrations higher than provincial water quality objectives. The problem of how to manage manure and fertilizer safely is getting worse. We concluded that it is time for the government to rethink its approach to this serious problem.

[English]

In conclusion, Mr. Chairman, our audit clearly shows the path the federal government is following in the basin is not sustainable, and that it has not yet fully adopted sustainable development. The government does have good intentions and good ideas, and many of these are described in the departmental sustainable development strategy.

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I can tell you that the departments have accepted the accuracy of my report and have agreed to implement the recommendations directed to them. I'm sure the departments will welcome your support in helping them to define and achieve their goals. Your committee may wish also to review the actions planned and under way by the Department of Agriculture and Agri-Food in response to our recommendations.

Thank you, Mr. Chairman and members of the committee. I look forward to your questions and to continuing the discussion later. Thank you.

The Chair: Merci. Thank you, Madam Gélinas.

Ms. Baltacioglu, welcome to our committee. I think probably we'll hear from you, from Agriculture and Agri-Food Canada next, and then we'll have our questions.

I'm always amazed at the Auditor General's report. For a number of years I worked with public accounts.

Howard, you know it's like back home where we have this little wire with the big shock that goes across for the cattle.

I think probably that's what the report sometimes does to us, too, as members of Parliament. There are some very startling points there, and of course we have to make note of them.

So with it, Madam, welcome, and can we hear now from Agriculture Canada?

Ms. Yaprak Baltacioglu (Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food): Thank you very much, Mr. Chairman.

I have with me my colleague, Simon Kennedy, who is the director general of policy planning and integration, and Frank Brunetta, who is our director general of review.

I do have a prepared statement, Mr. Chairman. It is quite a lengthy one. So I suggest that in the interest of time and to allow members to ask questions to both Madame Gélinas and myself and my colleagues, I would like to table that. It is available with the clerk in both official languages. So hopefully that will save us some time.

There are four main points in my statement, though, just to highlight. One is that agriculture and agrifood is a $130-billion industry. It is part of the economic engine of this country. Therefore, it is a priority to ensure that this sector grows and prospers in an environmentally and economically sustainable manner.

The second point we make in our statement is that the department takes this responsibility very seriously, and we do have as one of our business lines the health of environment as part of our business plan. I believe when our minister was here a couple of weeks ago, he did outline the business lines and where environment fits into that.

Our departments are working very diligently to ensure that we work together as one department in terms of how we do research, how we do programs, how we develop policies. We are working as one department, which, as I say in my statement, means we connect the dots within our department in terms of our work. That applies to all our business lines, especially the environmental business line.

The third point in my statement is that environment most probably is one of the most horizontal policy files in the government. It cuts across departments and it cuts across jurisdictions. Therefore, in Agriculture and Agri-Food Canada, we recognize that we cannot work by ourselves, without a partnership of our colleagues in Environment Canada, Fisheries and Oceans, and other natural resource departments. Therefore, we have put in place many mechanisms to ensure that the coordination and cooperation is there.

The last point in my statement, Mr. Chairman, is that agriculture is a joint jurisdiction between two orders of government, both federal and provincial governments. Therefore, nothing really happens unless both levels of government work together in a very collaborative fashion.

As you all know very well, our minister, Mr. Vanclief, met with his provincial and territorial colleagues in June this last year in Whitehorse. At that particular meeting, the ministers of agriculture reached an agreement on an agriculture policy framework, which has five components: risk management safety nets; ensuring the renewal of the sector in terms of skills and tools; ensuring food safety and quality—Canada is recognized around the world for its high-quality food; environment is part of the agriculture policy framework; and of course science is part of the framework as the underpinning of all of this.

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We are working with our provincial colleagues right now to ensure that we can make this policy vision into programs on the ground in the coming year. Yesterday, Mr. Martin said in his budget that the federal government will be there to provide its share of predictable and long-term funding to this initiative. I would say that's a very successful beginning for this policy file, and that hopefully all of these actions will address most of the issues that were raised in Madame Gélinas' report.

Thank you very much, sir.

The Chair: Thank you.

Howard, would you like to lead off?

Mr. Howard Hilstrom: I'll defer to my colleague, David Anderson.

The Chair: Thank you.

Mr. David Anderson: Thank you. Thanks for coming today.

Some of us feel that often government hinders rather than promotes growth, particularly on the prairies, and sometimes they end up being the problem, rather than the solution. I'm wondering, have you done any environmental analysis of governmental interference in agriculture?

An example that I can think of right away is the Canadian Wheat Board: prairie farmers are forced to market their wheat through it. Because of that, people like the organic producers have a difficult time marketing their wheat. The Wheat Board is not that interested in marketing their wheat. The Wheat Board is way behind on the idea of identity-preserved wheats, so if farmers want to grow specialty crops and small amounts of them market them themselves, they're not allowed to do that. Their only alternative then is to go back to the traditional method, which is to apply lots of fertilizer and get that production up to try to sell that bulk amount of wheat.

Have you done any study of the environmental impact of government policies on farmers?

Ms. Johanne Gélinas: No, we haven't done anything like that. What we focused on for this report was really the state of the environment with respect to the Great Lakes and the St. Lawrence River basin, and how the federal government managed that.

Mr. David Anderson: This is the core of your new program, or framework, that you're setting up, and I'm wondering, have you studied the economic impact that this new framework is going to have on producers? That's directed to AAFC.

Ms. Yaprak Baltacioglu: In terms of your question about the Canadian Wheat Board, first of all, I cannot tell you if there was any assessment done on that issue, but I will endeavour to take this on and provide the answer to you at a later date.

In terms of the economic impact of the agricultural policy framework, the agricultural policy framework is about an integrated strategy. It is to ensure that Canadian agriculture is strong and prosperous and is sustainable in the long term. So this is about economics of this sector.

If you're asking me what is the impact of environmental initiatives on the income of farmers, if that is the question, yes, we are looking at it. The last time our minister was here he did clearly articulate that the farmers in many cases cannot pass on the cost of environmental actions to consumers. Therefore, there is going to be help required to ensure that farmers can improve their environmental practices.

Mr. David Anderson: What kinds of initiatives is the government prepared to take there? When you talk about food safety issues and traceability things, when you talk about environmental impact studies that have to be done for every farm, the producers directly bear the cost of those things. What are you prepared to do, as a government, for them?

Ms. Yaprak Baltacioglu: The exact nature of the programs will be developed with the provinces, because this is a joint framework that we're developing with the provincial governments.

However, there are a number of initiatives under the environment. For example, the Whitehorse agreement talks about comprehensive environmental action, which can range from on-the-farm environmental planning, which can range from ensuring that farmers have the tools to make environmental decisions.... For example, we're in the process of updating our environmental indicators report, which Madame Gélinas refers to in her report, to ensure that farmers know the state of the environment; that they have the science and the tools to improve the practices, and some incentives around that. But I cannot tell you exactly what those incentives are going to be.

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Mr. David Anderson: And you're aware that not all the provincial governments are on side with regard to the environmental farm studies and those kinds of things, are you?

Ms. Yaprak Baltacioglu: Sir, I can only go with what federal and provincial ministers agreed to in Whitehorse, and they reaffirmed this strongly in Toronto when they met on I think October 11. All provincial ministers, both publicly and during the meeting, supported the agriculture policy framework, which does say “comprehensive environmental action on farms”.

Mr. David Anderson: As a producer I have a major concern, and it is that farmers continually seem to bear the burden or the blame for the environmental problems we're having in society. In the last year I don't know of once that I've heard about the problems of urban sprawl. It's affecting agriculture in many ways in the Great Lakes. Alberta is another area where you have a disruption of ecosystems. The cost of land is one of the things that's impacted by this. Have you done any study on the effects of urban sprawl on agriculture and then the resulting cost to producers?

Ms. Johanne Gélinas: No. But on the other hand, with our audit we have been able to raise this point too and indicate there's an issue there. We raised that aspect that we may have an impact also on agricultural land if we don't look at community development and urban sprawl.

If I can come back to one of the points you raised, what we are raising in our report, and this is a concern, is that every program and policy at the federal level, and of course with respect to Agriculture Canada, should be looked at in terms of the three pillars of sustainable development. These are the economic aspect of any policy and program; the social dimension of it; and the environmental aspect of it. Then decisions can be made in a way whereby you've had all the information to take a good decision. Then if you have to apply a different program to support the environmental impact of some practices, you will be able to do it. But there's often a missing part in the agriculture department's work, and this missing part is the environment. They have to do more work with respect to environmental evaluation of the agricultural practices.

Mr. David Anderson: Can I suggest one thing? I think they've gone way overboard on the environmental one on this new framework because clearly they're leaving out the economic framework. They're trying to move away from supporting farmers. I would suggest that no other department has abandoned its constituents like the AAFC has done.

We have a Department of Health to protect food safety and health issues. We have a Department of the Environment that is in charge of protecting the environment. AAFC has clearly made those two things the cornerstones of their new framework in an effort, I would suggest, to get away from supporting farmers. So you move away from the social. We're clearly moving away from social support for farmers; we're clearly moving away from economic support for them; and we are primarily focused on the environmental issues in this whole new framework.

Ms. Yaprak Baltacioglu: Mr. Hubbard, may I respond to that one for one minute?

The Chair: Yes.

Ms. Yaprak Baltacioglu: The agriculture policy framework is a policy for agriculture. It has a comprehensive view of agriculture. There is no economic sector that could be prosperous in the long run unless it pays attention to issues like environment. Sustainability is a way of life for all industries, all sectors, and all countries. There are implications of not taking environmental action, and it can have actually quite serious economic implications for the agriculture sector.

There are a number of studies that show.... The University of Guelph had recent studies in terms of the implications of non-action on the environment for the income of farmers. There are other issues. There are liability issues; there are public perception issues; there's the possibility of losing markets because of the perception of what Canadian agriculture is.

I must say, Canadian farmers are very good stewards of the land. Therefore, I do agree with you that it should not only be the agriculture sector that's blamed for all pollution and every issue that happens. That being said, our farmers have to be recognized all across the world for being the best in the world.

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Our agriculture policy framework has not left the economic aspects out.

The ministers agreement in principle from Whitehorse says this framework will not take away from the safety nets. It will build on what they have started with the safety nets framework.

The Chair: Thank you, David.

I know Marcel has been patient here, because he's a great patron of the basin, and he will have some questions on the lower St. Lawrence and that area.

Marcel.

[Translation]

Mr. Marcel Gagnon: Thank you, Mr. Chairman.

This is indeed a good meeting we are having this morning, but it is also a bit demoralizing. Madam, I think you paint a very accurate picture of the environmental situation and clearly raise the issue of sustainable development. The woman whose name I have a hard time pronouncing says the department takes the situation seriously. She says work is being done cooperatively. And yet the finding is that the situation is worse. Despite, as you say, an improvement in the Great Lakes, there has also been a deterioration elsewhere. It is a bit depressing to hear that. We should at least acknowledge that the environment is in difficulty, that we are self-destructing, that the department is taking this seriously, and that efforts are being made.

Ms. Gélinas, you even mentioned moneys that should have been spent. For example, only 12% of the $125 million that should have been spent on the environment since 1994 was spent where it was supposed to be spent.

I do not know what to ask because it is a bit like I said. I want to ask a question that will encourage me, and the Canadian Alliance here beside me thinks environmental protection is moving too quickly.

Do we want to destroy the planet? If the environment is of no real use, then what of sustainable development? I wanted to ask the woman from the Department of Agriculture whether they are in fact serious when they say that the Department of Agriculture is taking charge of the environmental protection and sustainable development situation. How can you say that when the findings are virtually the opposite?

[English]

Ms. Yaprak Baltacioglu: The department is taking this issue very seriously.

When this report was being prepared, was there room for improvement? Absolutely. Is there room for improvement? There is room for improvement in many things we do.

However, here are some of the examples of what we have done. In our research branch we have 19 research stations all across Canada. They all do research and science on agricultural issues. This year we are realigning the work of the research branch under four national programs, so that these 19 research stations don't stand alone and set priorities on their own. Instead, they'll be governed by four cross-cutting national programs.

One of these national programs is environment. What does this give us? This ensures that we put the right resources to the right places. Our science supports not only departmental policy development, but also provides tools for the farmers to improve their environmental practices.

This is one of the things that Madame Gélinas said in her report in terms of our science and how it does and doesn't support the environmental actions.

• 1045

The second thing we have done in our research branch has been, again, very much influenced by Madame Gélinas's report. The report says that in our research we don't really think about the environmental implications...for example, for other agricultural reasons, if we're doing research. We have now put in place a system, and I have forgotten the name of the system, where we assess every project against a set of criteria. One of them is the implications for the environment.

So this is just an example of what we have done and what we are changing.

Again, in the department there is a level of criticism in terms of whether we do the environmental impact assessments of our policies and programs as effectively as we should.

We have legislative requirements under the Canadian Environmental Assessment Act as well as the Farm Income Protection Act. We do have requirements to review these programs, and we have been doing so in the past year.

Can we do more? Absolutely. I think what we have learned from this report is to organize ourselves to do that better.

[Translation]

Mr. Marcel Gagnon: I would like to believe you. If what you say is true, we should see the results somewhere. For example, for 1998-99, people over here said we are spending too much money on the environment and not enough on economic development. For 1998-1999, in paragraph 13 of Ms. Gélinas' speech, it says that of the $211 million spent on economic development, $5.4 million was spent on research or environmental protection work. Where there is destruction, there must also be the capacity not necessarily to construct, but at least to maintain. Currently, we are still destroying. It makes me think of a caricature I saw of someone who was concerned about the environment. A camel was depicted chewing on dollar bills because there was nothing else left to eat. You cannot last long on that kind of diet. It is not just about development. You also have to think about—

You are all encouraged by yesterday's budget speech. Where, in yesterday's budget speech, do you see environmental concerns, Madam?

Ms. Johanne Gélinas: I will not comment on yesterday's budget, if you do not mind. I would like to reserve judgment until I have had some time to read it carefully. But I would like to come back to some of the points you raised.

First of all, I certainly do not want to leave you with a completely negative impression of the efforts that have been made in the field of agriculture. A number of programs and projects have been set up in cooperation with Agriculture Canada. In some cases, the programs are voluntary. I doubt that all of the goals of sustainable development can be met through voluntary programs. What is important to do is to ensure that the program resonates with the community, and even leads to changes in their practices. I would say that Agriculture Canada is a department that focuses heavily on research. There needs to be a transfer of environmentally friendly technologies, which, judging by the findings of our audit, is still lacking.

I was saying there were some good ideas. There are the agro-environmental advisory clubs in Quebec and the Environmental Farm Plans in Ontario. There is also all of the work Agriculture Canada has done around agro-environmental indicators. Those are promising developments. What is lacking, however, is an assessment of these programs to find out how much of an actual influence they have on improving environmental quality.

That is a job that Agriculture Canada, in response to our recommendations, undertook to do more of in the years to come. Furthermore, over the years, they have developed a sustainable development strategy for each specific sector. What we say in our report is that it is going to take a specific action plan, which is still lacking, with a timetable for implementation, so that we can track their progress over the years and not discover, 10 years down the road, that very little work has been done. So we really need a way to measure any progress. The information currently available to us is too vague for us to be able to make any headway in this area.

• 1050

Mr. Marcel Gagnon: I think there has to be a timetable and monitoring in order for there to be implementation...

[English]

The Chair: Marcel, I'll come back to you.

Murray.

Mr. Murray Calder: I want to switch gears a little here. One of the things I noticed with your audit that you haven't really covered is the disconnect between urban and rural Canada. It is a major problem both for myself as a farmer, in my other life, and as a consumer.

Right now within the poultry industry we're working on a HACCP program. We should have our farm compliant by the end of this year, and next year we'll start working on ISO 14001.

I'm wondering if you would comment on the fact that perhaps we should take a look at a HACCP-style program for taking a look at the environment, because we already have the environmental farm plan. That's my first question.

I'm about 25 miles away from Walkerton, so I know it's going to be a big issue.

My second question is on the disconnect I was talking about. Right now, farmers have fewer and fewer processors to sell to. The processors are driving an agenda to see agricultural operations get larger, for efficiency. And yet the urbanite still likes to take that drive through the country and see all the pastoral operations out there. So there's definitely going to be a cost attached to both. I'm wondering who is going to pay that. Is it going to be the farmer...because of phosphorous...that you talked about?

This is given the fact too that the urbanite is using 15 times more on a per acreage basis than what a farmer uses in pesticides and fertilizers. You get a good downpour and that all goes into the storm system, which goes right back into the river.

So have you taken a look at what the per acreage application is in urban Canada and the effect on the basin?

Ms. Johanne Gélinas: No, we didn't look at this. Essentially, at some point you might be disappointed by my answer, but I have to stick with the report and what we looked at.

We looked at how the federal government managed some issues in the Great Lakes. Agriculture was one.

I'm not here to set up the policies, what should be done in the future. I'm raising some issues. We are raising the same issues as you are and we are asking how Agriculture and Agri-Food Canada will deal with those issues.

On the other hand, perhaps I may add that in the future we will look at sustainable communities. We will see that disconnection and how it is in the rural world and how it is in the urban world and how their objectives can connect to each other.

Unfortunately, I'm not in a position to give you a clear answer to your question. Perhaps my colleague is.

Ms. Yaprak Baltacioglu: I have a comment on potentially looking at the environmental action on farms along the lines of the on-farm HACCP in terms of the food safety systems. Most of the producer groups I have been talking to and our department has been talking to have been telling us that the on-farm HACCP has really taken on quite a push behind it. It is because the producers are doing it. It's because the industry associations are doing it. The chicken farmers of Canada, for example, the pork producers—they're all behind this action.

I know there's always quite a lot of criticism about these being voluntary and therefore perhaps not having the teeth. Actually, they have more teeth than if it was declared mandatory, because it is farmers doing it together, and they are doing it together. They are going to be comprehensive, because the associations are starting to require 100% coverage.

You would know this probably better than I would because you can't brand Canadian chicken as best or as safe or as on-farm HACCP-recognized if you have some people doing it and some people not doing it.

So in terms of the environment, I think it's somewhat lagging behind on the farm food safety initiative. But I think any action can be modelled, and it will have to be modelled, with the direct involvement of the producers, or else really the main change won't happen on the ground.

• 1055

Mr. Murray Calder: From a cost perspective, everybody benefits. Everybody wants to have three meals a day.

My concern right now, for instance, after the Walkerton experience last year, is there's going to be an overhead cost put on farms that don't have a proper nutrient management program for manure storage, etc., whereby you're going to accelerate the disappearance of the small and medium-sized operations. You're going to actually push the agricultural industry to these big farms that everybody doesn't seem to want.

Obviously there is a cost that is going to have to be shouldered by somebody. I'm wondering, do you think it should just be the farmer? Do you think there's a responsibility of the consumer—because there is a benefit from that also? Who should share this cost?

Ms. Johanne Gélinas: One of the reasons we pay so much attention in my office to sustainable development, Mr. Chairman, is that we believe it's important to look at the three parts of SD, which are the economy, the social, and the environment. We have to figure out, after we have a good understanding of what the impacts of agriculture are with respect to these three aspects, where the priority should be put.

It's not my job to set up the priority. What I'm saying is there's some information missing at the moment to take well-informed decisions at the federal level. We have to gather all this information. How much will it cost to have a strong program with respect to manure and fertilizer? I cannot give you the answers, but, like you, I'm raising those questions.

I'm here to say this has to be considered with respect to SD. Some decisions will have to be taken in the future on where our priorities are and what, as a society, we're willing to have.

Mr. Murray Calder: One final question.

The Chair: Murray, be brief, okay?

Mr. Murray Calder: Okay. This is going to be a short one.

You said on page 3, at point 10, in the first bullet:

For example, of the $125 million in new funding announced by the Minister of Environment in 1994 to support the Great Lakes action plan, departments received less than 12 percent.

Where did the 88% go?

Ms. Johanne Gélinas: I don't think we can give you that answer, can we? Part of it?

Mr. John Reed (Principal, Office of the Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada): Actually, if you go to page 282 of this report you'll find a graph that speaks to this issue specifically.

Where did it go? It was never handed out. That was the bottom line. It was announced as a five-year program for $150 million in total—$125 million in new spending. Year one money was allocated, and then the flow was just stopped. The money was never distributed to the departments.

The Chair: Thanks, Murray.

Here's just an aside for Mr. Reed while you're on that issue. Environment Canada, if I recall, did put a considerable amount of money into the St. Lawrence environmental clean-up and study about three years ago. Are you considering that too, or are you just looking at Ag Canada?

Mr. John Reed: The $125 million I spoke about on the Great Lakes was for seven different departments. On the St. Lawrence side there's a kind of equivalent federal program that has a different set of numbers associated with it. It includes Agriculture, but not exclusive of other departments.

The Chair: But can you give the committee the size of that program on the St. Lawrence? It was a cooperative agreement, I believe, with the province of Quebec. It was a very significant amount of money.

Mr. John Reed: Yes.

The Chair: I think the committee probably should get it, if you have it. Maybe we can get back to it later, if you don't have it at your fingertips.

Mr. John Reed: We do have it in the report. I'll just come back.

The Chair: Okay.

Dick, could you...?

Mr. Dick Proctor (Palliser, NDP): Thanks, Mr. Chair. Thank you, everybody, for being here.

I find this is still a very devastating report. It says very clearly that farming practices are unsustainable in places. It talks about critical gaps, out-of-date information, action plans that are undeveloped, an absence of measurement of key programs, a need for more effective management, and federal programs and policies that aren't working well together.

• 1100

Now, the preamble, in the main points—and I'll direct this to the departmental folks who are here—says:

Agriculture and Ag-Food Canada agree with our recommendations to it. ... ...although it is not clear whether they will address all aspects of the recommendations.

The direct question is, are you going to be addressing all aspects of these recommendations?

Ms. Yaprak Baltacioglu: Yes, we will be addressing all aspects of this report. In terms of the recommendations, there are quite specific issues that the department will have to improve. We have already started.

When this report came out, and for the years upon which the audit was based—I don't know which years; maybe John Reed can clarify—since then most of the recommendations that are here are either fixed or in the process of being improved. So we have taken action since this report, and actually our actions had started before.

With the discussion on the agriculture policy framework, we should be able to tackle some of the very critical results of this report, involving federal-provincial cooperation, who does what, and what concrete results we are trying to achieve—that would be the hardest one.

Ms. Johanne Gélinas: Mr. Chair, if I can just add something on this with respect to the reply of Agriculture Canada, I have to say that from an audit perspective or standpoint, the nature of the reply we got is too vague for us to really track progress in the future. As you probably know, we are doing follow-up work, as the Auditor General does, and we need to have clear commitments—in terms of actions, measures, deadlines—to be able to follow through. Unfortunately, in some areas, based on the recommendations we made, it's not that clear how the department will address the recommendations, even where they may have agreed to move ahead with the recommendations.

If I can just come back to your previous question with respect to dollars, we have a figure in our report saying that from 1993 to 1998 dollars for environmental work within the Department of Agriculture decreased by 75%. This is a huge figure with respect to environmental expenditure within the federal government.

Mr. Chairman, we have the answer to your question. I will let John Reed respond to it.

The Chair: It's for the committee.

Mr. John Reed: This is responding to the amount of money put into the St. Lawrence vision program. This program is now in its third phase—the third phase running from 1998 to 2003. The federal contribution across a number of departments over that period of time is $123 million. There's a later graph in the section dealing with that program that illustrates they did experience some cuts to those announced figures, but not as significant as the cuts I described for the Great Lakes' portion of the program.

The Chair: Dick, continue.

Mr. Dick Proctor: Thanks, Mr. Chair. And thanks for those answers.

Let me just ask two quick questions in the short time I have left. You've identified urban sprawl, noting that basically in this century it has reached 16% in Ontario, I guess. You say in a kind of defeatist attitude—I wish it had been put another way—“Further losses are inevitable as urban areas continue to expand”. It would have been nice to see something that says we should address urban sprawl—that we need to have federal-provincial rules on it—rather than say this is simply going to happen.

The other part of it is, you say, “Farming practices in the basin are having effects that cannot be sustained”. Which is worse, I guess is what I'm trying to ask, the farming practices or the continuing urban sprawl? Is one more significant, from your point of view, than the other?

Ms. Johanne Gélinas: I will say they're both important, really, depending on which way you look at it. From an urban perspective, they will look at farming practices as being the problem; on the other hand, you will look at urban practices as being the problem. I think both need to be addressed seriously, but I won't go for one or the other. These are two major issues that we need to look at.

• 1105

John, will you let my colleague expand on that?

A voice: Sure.

Mr. John Reed: If you had asked which is the greater threat, agriculture or population growth, as opposed to urban sprawl, I think population growth would have to be it. I think we have a figure in the report that talks about three million more people living in the basin within a generation. Obviously, they grow, they need space to live, but they consume water, they consume resources, energy, flush their toilets, buy cars. So just the nature of population growth is going to draw more on the resource base.

Ms. Johanne Gélinas: And they need to be fed, too, so agriculture is key.

Mr. Dick Proctor: Very quickly, Mr. Chair, thank you.

Specifically on page 161, the Bay of Quinte report...I grew up in the reflection of the Bay of Quinte. It's a place that I consider to be one of the most beautiful spots in the world, and it's really discouraging to see the initiative that was started there in the early 1990s didn't develop, even though it appears from the report that another watershed did implement this program. What happened? How come that initiative wasn't followed through?

Mr. Peter Morrison (Director, Office of the Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada): Thank you, Mr. Chairman.

We didn't pursue the details of why that particular initiative was not followed. In our discussions with the people in the Bay of Quinte, they told us they had achieved their targets; they felt they were on track to delisting, to achieving the water quality improvements they were after, and they had chosen not to pursue that particular initiative. I can't give you any more details than that, I'm afraid.

Mr. Dick Proctor: Thank you.

The Chair: Madam Ur.

Mrs. Rose-Marie Ur: I would like to thank the presenters here for the interesting information.

To go on Dick's intervention on whether it's population or agriculture that's causing our greatest problem for the environment, this may come as a surprise, but farmers live with their families on their farms and they're equally as concerned about the environment as anyone else. All too often our urban friends get left out of the picture and they're seen as doing everything to protect the environment. I can tell you, I've seen many manicured lawns in our large urban centres and even our small towns that certainly have had a lot of pesticides applied and all the rest—fertilizer—and when we have a heavy rain, guess where that flows. It doesn't stop at the storm sewers; it goes down to our waterworks. So I think when we look at this we should look at it in an encompassing way, not just look at the rural aspects.

There's a program in the agricultural and environmental stewardship initiative that was funded through the CARD program, a $10 million program, to address environmental concerns regarding water quality. Its primary focus was on water quality, soil and manure management, food processing waste, and issues of that sort. How well has that been addressed? Is $10 million really sufficient to address such a large portfolio?

I want quick answers because I have two more questions.

Mr. Peter Morrison: We didn't look at how well that particular program was working specifically. We do have concerns, however, that it appears the department has not tracked how well those programs are achieving their objectives. One of the overall themes that runs through the report is the lack of evaluation, lack of understanding, of what the effects are on the ground.

Mr. John Reed: May I make a very quick comment? We're here talking about the agriculture sectors, for obvious reasons, but your point about other sectors is an important one, and in other places in the report we do talk about other sectors.

For instance, municipal effluents is another area where there's a lot more progress needed. We still have 40% of urban communities in the basin releasing...you know, the only level of treatment is primary treatment that is not very sophisticated. Again, we're talking here about agriculture but the issues in the basin are far beyond the agricultural sector.

• 1110

Mrs. Rose-Marie Ur: I guess because I represent a large rural riding, I'm very protective of how well they do their job out there.

Also in your presentation, you stated that the NISA account has not been assessed as required. You also had a real concern about soil erosion, and I'm sure you're aware of the fact that farmers, in my part of the country anyway, have moved to no-till. I certainly think that is a positive aspect to agriculture that has made a great impact on soil erosion. I don't know if you have any comment on that.

Ms. Johanne Gélinas: We're aware of good practices to deal with soil erosion. Nevertheless, that's still a major problem that needs to be addressed, Mr. Chairman, because, as I said, if we go on the actual path, it will take 90 years to resolve the problem, to get to a break-even situation, which is quite a long time. We have to move ahead faster on this issue to protect our soils.

Mrs. Rose-Marie Ur: I don't know whether this is in your purview or not, but what indications would you give in moving in that direction?

Ms. Johanne Gélinas: What we are saying is that research done by Agriculture Canada should look at this, I won't say more seriously, but consider it a priority to move ahead with a good solution. I mean, if we look at what we have in hand at the moment, the progress is not fast enough to resolve the problem. Do we have specific examples we can maybe give you on how to address that, John?

Mr. John Reed: Thank you, Mr. Chairman.

We have a whole section dealing with soil, obviously, and we make the point that there has been a huge adoption of no-till and conservation tillage that has had an effect on reducing the rates of soil loss. I think the role of research becomes important here because there is some research now suggesting that that kind of tillage can create, unintentionally, different kinds of problems. Therefore, the role of research has to focus on where the best additional gains can come from in managing soil erosion. It's not just more tillage and more adoption of this. The latest research says we need to be pretty careful about the kinds of practices we're promoting here.

The Chair: Thank you, Mrs. Ur.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

I thank our guests for being here. It's a subject that's obviously going to take longer than an hour and a half to debate.

There seems to be a conflict between the auditor's report and Agriculture Canada. In your report, Madam Gélinas, you have indicated that there's no forward thinking, that there's a loss of momentum, there's no innovation—that's from government in general; we're hearing from Agriculture now, so I'll stick with Agriculture—although in the report from Agriculture Canada it says they have in fact gone forward in their environmental farm plan. In Ontario, they've got 19,000 farmers in the program. In Quebec, 4,000 are in the environmental program. On one hand, you're saying there's no innovation, no momentum. On the other hand, they're saying there is innovation and momentum. In view of this conflict, perhaps you could respond to that and say if this is simply lip service from the Department of Agriculture, or is this real innovative momentum forward?

Mr. Johanne Gélinas: What I'll say about that is that we started our audit early in 2000 and we closed the books sometime in April 2001. During the process of auditing, of course, we have discussions with the departments. They know where we're going. They may decide to put more priority on some things we raise. So after the time we close the books, sometime in the spring of 2001, they will look at our report, and that's the good news about it. They are ready to move ahead with some initiatives that will address some of the issues we raise. It's probably just a question of timing. We raise some issues and they move ahead with some of them.

Mr. Rick Borotsik: Perhaps I could have a comment from Yaprak.

Ms. Yaprak Baltacioglu: I don't think there's very much of a difference in terms of what we're saying. We did take what Madame Gélinas' report says very seriously. We have been working on environmental issues for a long time in our department. Ours is actually one of the few departments that actually devotes the energy and attention to environment the way we have done.

• 1115

Mr. Rick Borotsik: Thank you. That's a perfect segue for my next question.

Ms. Yaprak Baltacioglu: And we will do more.

Mr. Rick Borotsik: I know.

By the way, everyone around this table supports agriculture, the sustainability of agriculture, and the producers themselves are the best stewards with respect to agriculture.

When you talk about the Department of Agriculture being perhaps in the forefront, we talked very briefly about how in the basin particularly, there are other industries that should be brought in. If you want to talk about the Hamilton steel mills and what's been happening with the Great Lakes, you can't blame that on agriculture. As for municipal waste systems, I have a soft spot in my heart for municipal waste systems, but they are terribly inefficient. I think probably if you looked at the municipal side of it, going into the Great Lakes and the basin, you'd find more of an impact there than you do from agriculture.

We talk about human encroachment. You're right. Three million more in population is going to impact the basin substantially more than what our agriculture producers are doing. I know you're appearing before the agriculture committee, but we get very sensitive about this when we deal with our own producers.

Why is it that there's not more emphasis placed on those other impacts, rather than just on agriculture?

Ms. Johanne Gélinas: Maybe I can have my colleagues give you the context of why we have chosen those specific issues to move ahead on with respect to the Great Lakes.

Mr. John Reed: Thank you, Mr. Chair.

I'm not sure we could say there isn't emphasis being placed on the other sectors. We didn't try to tabulate which one's getting more attention. Industry has been heavily regulated for almost 20 years, and they've produced a number of—

Mr. Rick Borotsik: Regulated and enforced are two different issues, though, Mr. Reed.

Mr. John Reed: Fair enough. They sure are. But they've been regulated, that's for sure, both provincially and federally. We make that comment in the report.

On the municipal side, the approach has been different. It hasn't been through regulations; it's been through infrastructure, capital investment largely, and encouragement around—

Mr. Rick Borotsik: Or lack thereof.

Mr. John Reed: Or lack thereof.

Mr. Rick Borotsik: Can I just ask one more question, because the chair is going to cut me off soon?

In your report, you talk about the Canadian agricultural export target of 4% of world exports by 2005. I want to ask you a hypothetical question. With what I've heard and seen in your report, with the soil erosions and the lack of sustainability, is it your opinion the Department of Agriculture is going in the wrong direction trying to support an increase in world markets? Should they be backing off that particular type of philosophy and direction?

Ms. Johanne Gélinas: The only thing I can say about that is if this is a clear statement from the federal government that they will move ahead to increase exports, it's more than important now to address the environmental and SD issue to make sure we are on the right path to address sustainability in this country.

If I could add something, Mr. Chair, you're right, we did focus today on agriculture, but we will also have opportunities to talk about the fishery chapter with respect to the Great Lakes audit and other areas.

Mr. Rick Borotsik: Yes, but you're probably going to blame agriculture for the fisheries depletion.

[Translation]

The Chair: Claude, go ahead.

Mr. Claude Duplain (Portneuf, Lib.): Many of the waterways in the south-western Ontario and Quebec Basin apparently contain excessive phosphorous concentrations. Is there too much ranching for the available soil or are the regulations governing fertilizer or manure spreading too lax?

Ms. Joanne Gélinas: Unfortunately, I cannot answer that question. That is one of our findings. We think the problem has to be tackled head on in order to find solutions. If there is over-production, there is not enough soil to spread fertilizer or manure. It is up to the provincial and federal departments of agriculture to deal with this issue; nevertheless, this problem needs to be dealt with soon, because as we said before, we are heading in the opposite direction, away from sustainable development, if nothing is done.

Mr. Claude Duplain: I am going to ask a question that may make some people shudder. Your report makes us shudder. You have seen how Mr. Gagnon reacted, rightly or wrongly. I know some environmentalists who would flip if I gave them this report.

• 1120

We have been talking about budgets for some time. Murray asked who—the farmer or the consumer—would have to absorb the costs of various regulations. At any rate, it is always the consumer who ends up absorbing these costs.

Earlier, Mr. Gagnon and I were talking to someone who said that ever since he was a little boy, people said that logging in the Amazon was destroying the world's lungs, but today, we are told it is not quite so, that the leaves that fall are equivalent to the nitrogen or—

When I look at your report, it makes me panic. I would like to know how reliable this report truly is, environmentally speaking. We always discuss money. Is it because of money or regulations that we are not moving quickly enough to protect the environment? We have been discussing millions of dollars here, but if we make regulations... We talk of urban sprawl and population growth. Why not make regulations today on the direction to be taken to protect the environment and perhaps to fix certain things? True, some things have been done. What is most important?

Ms. Johanne Gélinas: You asked two questions.

First, you asked if the report could be relied on. My answer would have to be yes. It is founded on obvious facts. We have based ourselves on information that is available in the various departments. As concerns reliability, I would point out to you that my colleague in the Department of Agriculture is moving ahead with the recommendations and is aware of the problem.

When a problem is raised in our report, discussions ensue. Fertilizer and manure are a problem which Agriculture Quebec and Agriculture Canada raised a long time ago. We did not invent the problem. It already existed and has been documented. We look at the ways in which the federal government is working to solve the different problems that are raised.

That being said, you ask whether it is a question of money or regulation. It is a bit of both, but above all it is a question of changing the way in which Canadian citizens behave.

Each and every one of us has a role to play so that we can move towards sustainable development. As individuals, we have to take a look at ourselves. We have to ask if how we act is compatible with sustainable development. Farmers have questions to ask themselves. City dwellers have questions to ask themselves. It comes down to changing the way we act and behave. There is no one person to blame here. It is a problem that deserves our attention and we have to work together to find solutions.

At the beginning of her presentation, my colleague said that the environment is a horizontal issue. It is not up to one particular department to deal with this issue. It is a question of governmental responsibility, and all the players have to be at the table, be it Environment Canada, the Department of Fisheries and Oceans, Health Canada or the Department of Agriculture. It is an issue that is become too important and too complex to give a single department the responsibility of solving all of the problems. The environment and sustainable development are issues that affect us all.

[English]

The Chair: Thank you, Claude. Marcel has a little something.... Howard, if you could keep yours brief, then we'll go to Marcel.

[Translation]

Mr. Marcel Gagnon: Who has the floor then?

[English]

The Chair: One minute, Marcel.

[Translation]

Mr. Marcel Gagnon: Thank you.

Personally, I believe the report is reliable, however, it is not the report that is worrying me. Madame Gélinas, in your closing remarks you identified the heart of the matter: the environment is an issue that concerns all of us.

I am not trying to take the representatives of the Department of Agriculture to task here, however, I would rather be told that things are not going well, and to see us take action, instead of being told, for example, that the department is taking this issue seriously. We see the results. I think that we have to view this report as an extremely enlightened report. It is a red light being switched on warning about the future. We have to solve these problems.

I would like to thank you for the work that you have done. I would also like to thank the people from the Department of Agriculture for having brought us up-to-date on a situation that they understand well, but—

[English]

The Chair: Marcel, I'm going to cut you off there.

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[Translation]

Mr. Marcel Gagnon: My apologies. Thank you.

[English]

The Chair: Howard, do you have a statement? Then Rick has one.

Mr. Howard Hilstrom: Just quickly, if you wonder why agriculture and farmers are concerned about government initiatives, it was promoted on the prairies pretty big-time to have summer fallow over the years of the twenties and thirties. Then we had a big dust bowl. Then Minister Vanclief came out and told us again that summer fallow was pretty good, this summer, and whatnot. So we have a little bit of a problem there.

When it comes to environmental issues, I'm a cattle rancher and I run about 300 head along the lakefront. I fenced that whole lakefront off. I'm involved in HACCP for my livestock production and that. So the beef industry is doing its thing.

There are two disquieting things. One is down in Oklahoma, where the poultry producers are getting sued by a city for polluting two lakes. That gives rise to the issue of you saying there are three million more people likely to be in the Great Lakes Basin area, and the province of Quebec is increasing its population in the agriculture area.

With that increased population, of course, there is increased food production required, which you've mentioned. Under the Canadian government laws, it is required that food production occur in those provinces. The specific program is supply management.

Did you look at how much of an increase in farming there will be, including the increase in manure resulting from the increased food production, to keep accommodating ever-growing populations in this Great Lakes Basin? Is government policy going to be looked at, as to whether or not agriculture, where there's a manure management issue, should be spread out across the country? Should the government have a policy of spreading this out across the country, so that areas like Saskatchewan, which has a low population but a large land base, with over 40% of the arable land in the country, could accommodate a lot more of that supply management?

Is that something you've examined? Is it sustainable to have ever-increasing livestock production in Ontario and Quebec?

Ms. Johanne Gélinas: On your latter question, we haven't looked at that because we're concentrating on the Great Lakes.

On the first part of your question, I guess we have a—

Mr. Howard Hilstrom: The question is in regard to the Great Lakes—increasing dairy and chicken supply managed products in the lower Great Lakes Basin.

Mr. John Reed: We did not do that assessment, but the department has done the assessment of the national export target and has tried to look at the implications for the environment, economic growth, and so on. They have clearly identified some negative effects of that.

We did not look at what that has meant in terms of change of policy for the department. I think they may be in a position to answer that.

Mr. Howard Hilstrom: I would answer Yaprak then to comment on whether agriculture policy is looking at concentrating livestock production in certain sectors of the country.

The Chair: Howard, I think you've made your point.

I'm going to give Rick about one minute.

Mr. Rick Borotsik: All I need is 30 seconds. There was a comment in the presentation with respect to the net income stabilization account, NISA. You said there are gaps in compliance, where there hasn't been an assessment of that particular program. I assume that's the assessment as it conforms with the requirement—for what? I'm really nervous when I see that in there because NISA is a really good program, and when you start saying there hasn't been the assessment, please tell me why, or what.

Ms. Johanne Gélinas: There are some missing pieces, and Peter or John can address that.

Mr. Peter Morrison: As you probably know, there's a requirement under the Farm Income Protection Act for environmental assessments of those programs. Our concern was that there was an environmental assessment of NISA done in 1993. There should have been a report prepared in 1998. The department spent a lot of time thinking about what those environmental impacts and possible consequences would be, but they didn't produce a final report summarizing what that environmental assessment was. That was the concern we were raising.

The Chair: Rick, I'm sorry the time has elapsed. We have a brief in camera meeting afterwards, if everyone can stay for it.

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For the witnesses, we'd like to thank you for coming. As you can see from the questions—I know as chairperson I didn't have much time to think through some of my own questions—it's a very important issue. As Canadians we have to recognize that half of the problem, if there is a problem, is that there are two countries that border on the basin.

I just asked one of the researchers here about the three million people. Is that three million on our side or on their side? As Canadians, we probably have to ask if we're doing a better job or a poorer job than our cousins across the other side of the lakes.

It is a tremendous body of fresh water, and probably the biggest one in the world. It's very important for us as Canadians and North Americans—as good citizens on this continent. I'm not sure what the direction of the committee will be, but I know it's something we need to consider further, and agriculture is probably a very small part of the entire problem we have.

The Americans have done some good things with their Love Canal and their areas there. We as Canadians have worked.

In any case, thanks for coming. It certainly was interesting. We may want to have you back again. I say it is the old...on the farm, like Howard, and now he has that shocking system. Some of your statements certainly do shock us, when we hear what could be done and what probably has to be done.

In any case, the agriculture committee wants to look at these issues, and Agriculture and Agri-Food Canada wants to address them. As Canadian members of Parliament, we want to see a solution for the future, the 21st century, for Canada.

So thank you. With that, we'll adjourn this part of our meeting.

[Proceedings continue in camera]